Correlation Between JTL Industries and Sumitomo Chemical
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By analyzing existing cross correlation between JTL Industries and Sumitomo Chemical India, you can compare the effects of market volatilities on JTL Industries and Sumitomo Chemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JTL Industries with a short position of Sumitomo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JTL Industries and Sumitomo Chemical.
Diversification Opportunities for JTL Industries and Sumitomo Chemical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JTL and Sumitomo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding JTL Industries and Sumitomo Chemical India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Chemical India and JTL Industries is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JTL Industries are associated (or correlated) with Sumitomo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Chemical India has no effect on the direction of JTL Industries i.e., JTL Industries and Sumitomo Chemical go up and down completely randomly.
Pair Corralation between JTL Industries and Sumitomo Chemical
Assuming the 90 days trading horizon JTL Industries is expected to under-perform the Sumitomo Chemical. In addition to that, JTL Industries is 2.66 times more volatile than Sumitomo Chemical India. It trades about -0.13 of its total potential returns per unit of risk. Sumitomo Chemical India is currently generating about -0.05 per unit of volatility. If you would invest 59,160 in Sumitomo Chemical India on September 12, 2024 and sell it today you would lose (5,735) from holding Sumitomo Chemical India or give up 9.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JTL Industries vs. Sumitomo Chemical India
Performance |
| Timeline |
| JTL Industries |
| Sumitomo Chemical India |
JTL Industries and Sumitomo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JTL Industries and Sumitomo Chemical
The main advantage of trading using opposite JTL Industries and Sumitomo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JTL Industries position performs unexpectedly, Sumitomo Chemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sumitomo Chemical will offset losses from the drop in Sumitomo Chemical's long position.| JTL Industries vs. Sapphire Foods India | JTL Industries vs. Apex Frozen Foods | JTL Industries vs. LT Foods Limited | JTL Industries vs. Agro Tech Foods |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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